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Hotmail potential worm

Microsoft Hotmail Vulnerability

Release Date:
October 15, 2003

Critical (Potential Hotmail worm)

Systems Affected:
Internet Explorer and any software application used for reading Hotmail messages.

Microsoft has already patched the Hotmail system.

Finjan Software discovered a new critical cross site scripting vulnerability in Microsoft's Web-based e-mail service, Hotmail. This vulnerability had the potential to allow hackers to develop an attack that could have caused significant computer damage during regular e-mail use. The new vulnerability was reported to Microsoft and fixed within 24hrs.
This vulnerability resulted from the failure of Hotmail's active content filter to adequately block Active X controls and affected all system platforms that read Hotmail e-mail messages. An exploit could have launched automatically once a user opened an e-mail message. The vulnerability could have also potentially allowed a worm to read the address book of a Hotmail account, replicate and send itself to everyone in the address book, and have this process repeat at an exponential rate. This potential very dangerous Hotmail worm could have a large impact to the Hotmail user community. Due to preliminary detection and reporting to Microsoft, this scenario was prevented.
"This vulnerability was discovered and reported to us by Finjan Software", said Stephen Toulouse, security program manager, Microsoft Corporation. "We worked with Finjan Software to fix the issue within 24 hours and helped protect Hotmail users." 

"Finjan asked us to replicate the vulnerability to validate their findings," said Drew Copley, research engineer at eEye Digital Security. "Their discovery of the vulnerability in Hotmail is accurate and had the potential to allow hackers to steal contacts, write e-mails in the name of the Hotmail user, and run active scripting. This security issue was extremely dangerous because these are the components required to create an automated, mail-borne worm."

Technical details:
The potential worm could have done anything that the user could do. It was a potentially automatic attack. Users had to simply read the infected email message.
This was a cross-site scripting vulnerability of the Hotmail server.
The purpose of Hotmail's active content filter is to block the injection of any active content into Hotmail messages. However, the basic failure that allowed this vulnerability is that there was no blocking of dangerous tags if they are prefixed with more than two dashes, e.g. ---<LINK, ---<object, ---<iframe.
For example: <iframe src=http://www.finjan.com> 
The LINK tag can be used to call a CSS file that includes JavaScript code.

The injected JavaScript code is responsible for:
-Getting Passport/Wallet cookies.
-Automatic launching of malicious code.
-Identity theft using a spoofed re-login window (suggested by http-equiv@malware.com <mailto:http-equiv@malware.com>).
-Read and Disclose User inbox & contacts.
-Sending an e - mail message.

The JavaScript code has been used for creating demos, but Finjan Software won't reveal this source code.
The ActiveX control could have been used for a destructive payload of the propagating worm. It also allows propagation to non-Hotmail users.
The basic attack does not require an ActiveX control. The ActiveX control is the payload that can be used to extend the attack to non-Hotmail users, or to perform any malicious activity, including formatting of the hard disk
Upon using the ActiveX control, end user may get a security warning. It depends on the security setting of the browser. An example: <http://www.finjan.com/mcrc/demos/activex.cfm> (Click on the 'test me' button after reading the disclaimer)

This specific vulnerability has been eliminated by Microsoft based on Finjan Software notification. Finjan's content security products: SurfinGate for Web, SurfinGate for E-mail, SurfinShield Corporate and SurfinGuard Pro, provided proactive defense against this Hotmail vulnerability prior to its detection and correction. Finjan's patented behavior inspection engine will protect computer users from similar future vulnerabilities and comparable potential exploits.

Credit: Dror Shalev and Menashe Eliezer.
Reviewers: Drew Copley (thePull) , Liu Die Yu, Jelmer and http-equiv.

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